@D.T. Insurance premiums have come down considerably with the right insurers for houses (such as elders)

Tourism is the only major industry and its influence is increasing considerably. Timing the market would be a strategy in cairns as it suffered bad during the GFC. If AQUIS is approved there will be ripple effect also.

@D.T. Insurance premiums have come down considerably with the right insurers for houses (such as elders)

Tourism is the only major industry and its influence is increasing considerably. Timing the market would be a strategy in cairns as it suffered bad during the GFC. If AQUIS is approved there will be ripple effect also.

There are other posts around on PC regarding cairns

Click to expand...

Those of us holding Cairns are hoping for more than a ripple if AQUIS comes through. But I don't think it will.

My house insurance costs me $5000 and I couldn't get through Elders based on some roof assessment that I've now been waiting on for weeks.

Those of us holding Cairns are hoping for more than a ripple if AQUIS comes through. But I don't think it will.

My house insurance costs me $5000 and I couldn't get through Elders based on some roof assessment that I've now been waiting on for weeks.

Click to expand...

I doubt AQUIS is going go through.
QLD has quite a few casinos already (6?). The market is reasonable for that , but not that big, and they do have competition from Melbourne and Sydney, which will have soon to be barangaroo.
I just cant see another qld casino be a profitable venture.
In my view, fast fwd 10 years, the most sales intake will be queens wharf, barangaroo and crown Melbourne.

I wrote this on SS a couple of months ago and it's still apt.
Recently I've been to a few events that have had talks from valuers, economists, local experts etc and thought I would share what I have picked up from the presentations.

First thing being the composition of the economy and the perception that it's heavily reliant on tourism. The Gross Regional Product of Cairns for 2013-2014 was $14.355b. Of that ~$14b the direct tourism contribution was $1.388b and the flow on in secondary services is $1.846b. So that is roughly 22% of the economy that is made up of direct and indirect tourism.

Top contributors to the $14.55b was mining (10%), construction (9%), transport (8%), ownership of dwellings (10%), agriculture, forestry & fishing (7%), and admin support services (8%). The rest of the makeup belongs to other industry groups such as education, financial services, communications, defence, health & community etc.

Total 2013-2014 workforce was approx 130,000 with the top industry groups being health and community services (12%), retail (11%), admin and support (10%), accom & drink (9%), construction (9%) and education and training (8%).

Unemployment is 6.8% which is almost on par with the QLD average.

Cairns does have a lower yearly income average. The only reliable data I can find at the moment is from the ABS from 2011 which had an average income of $46,449 and during the same period the national average was $52,782. 2011 was still a year or 2 before the housing market and economy started to move.

From 1976 - 2011 population of the region has grown by 111% (1976 -128,030 & 2011 - 269,753). The projected growth is a 40% increase by 2036.

Cairns is the 3rd most visited place in Australia after Sydney and Melbourne and international and domestic passengers through the airport have increase. Domestic shows a 8.2% trend increase and international is a 17.5% trend increase.

According to the REIQ Cairns had a 8.2% increase last year but there are certain suburbs that have shown double figure growth and are continuing to show it this year.

Regarding chatter - there seems to be plenty of this around. Not just the forum with a few threads popping up, but from 'experts' such as Ryder and also the REIQ that are putting Cairns (as well as other places) on their watch lists.

As always, do your own DD. I'm not trying to suggest Cairns is a good place to invest or is a better investment than XYZ, just wanting to share some information.

In the meantime they've started construction on the new aquarium and the new Waterpark (I think?).

Every Saturday I've been attending opens with a REA mate of mine and most of the stock is moving quickly and not a great deal of discounting happening and this is all segments of the market as they don't have a particular territory.

Insurance still hurts a bit but depends where you buy. And AFAIK, Suncorp have a new product for blocks of 20 or less units that makes it a bit cheaper to body Corp should go down (and have seen this with one block where body Corp renegotiated their insurance and fees went down $300p/q).

IF Aquis goes ahead I think it will be a watered down version of the current proposed plan.

IMO, I think the overall sentiment is pretty good, particularly where I'm based on the beaches and see growth in the coming years as we've nearly recovered to pre GFC levels and the market and economy isn't as volatile as it was back then.

I am a long way from an expert so please take my words with a grain of salt.

@Kinnon Bell has detailed the projects either ongoing or slated, very comprehensively; and a couple on the list are actually nearly finished, such as the City Centre Alive project and the Homemaker Centre. There are also a couple of CBD apartment towers going through design / presales at the moment, and a uni campus is also opening in the CBD, so there are lots of "plans" floating around Cairns at the moment, which is at least positive! It's been a rough few years....

I agree there's a huge question mark over AQUIS, and it really wouldn't surprise me if it doesn't go ahead. The guy behind the Water Park has said they've "started", but I did hear a rumour he still doesn't quite have funding for it...? So I'm not sure about that one either, although I believe they've started some basic earthworks recently.

Acquarium site has just started earthworks, and as far as I know that one is a definite. The Sheraton Mirage redevelopment is a big one - IIRC they bought the whole complex for only about $35 million, but are spending another $250m?! (It does need it, though...quite dated.)

There has been a lot of talk lately about some limited dredging of the inlet, which if it can go ahead could really help to bolster the local economy. Not only for cruise ships (I'm not even sure if they are talking about dredging deep enough for those, any more) but if we could have a Navy vessel based out of Cairns it would be a huge injection - thousands of homes needed, families needing schools and facilities, extra people wanting to eat out, make purchases in the region..... it's still a loong way away but it would be great if we could make it happen.

Anecdotally, a lot of local businesses are still doing it tough. People living here are still being very careful with spending. The Asian Fin Crisis, leading into the GFC... the strong Australian dollar... high local unemployment..... there have been a lot of things affecting Cairns, and it's going to take a while to bounce back. There's still a LOT of vacant commercial spaces around town (although it looks like there has been a little uptake in the last few months) so until that is filled there is not really going to be any pressure to build more. In the CBD, the council did its own City Centre Alive upgrade/revamp, but there are a lot of privately owned buildings in desperate need of a refurb / spruce up.

Getting on to resi property.....

Insurance is still a big expense. @Bran 's experience of $5,000 premiums sounds horrendous! A 3-bed 2-bath block house in Bentley Park costs me just under $2k p.a. to insure, but it's nowhere near a flood zone.

Pre-APRA changes, the market was starting to pick up I think - this is just my loose impression, I'm not actively looking to buy atm so haven't been doing that much research, but we do usually go to a cpl of open homes most weekends.I believe it quietened off for a period once the investor rates were bumped and lending rules tightened up, but there's still movement. There are (IMO) some good buys to be had, but our next purchase will be our PPOR so we're out of the IP game for the short term.

Cairns does have a lower yearly income average. The only reliable data I can find at the moment is from the ABS from 2011 which had an average income of $46,449 and during the same period the national average was $52,782. 2011 was still a year or 2 before the housing market and economy started to move.
...

Click to expand...

these two points are the key for me...and suggests a lot: Combine low salaries with higher than average [already high in qld] unemployment ...just the opposite of a place like Sydney [ I know comparing the 2 is not right, but you get what I'm trying to say- below average income + below average employment suggests not only is it hard to get a job, but even if you do, its tough to get a well paying one...just the opposite of Sydney...]. ..just seems too speculative discretionary proposition to me. The word discretionary is probably what I'm trying to say...Many other places are not- and id think that's where real estate is better suited to.

Yes, but further dredging would allow much larger vessels, along the lines of an additional 3,000 personnel, is what I heard. ?

Click to expand...

Not sure, I think there was a defence white paper or similar a few years ago recommending a reallocation of resoures by moving assests north from Garden Island in Sydney.
Speaking of things nautical, there is a major competitive tender by local companies for the 2 billion Pacific Patrol Boat contract to be built in Cairns as well.

@HUGH72 Yes I've heard/read a lot about the tender but don't know anything further than that. That would be another great outcome for Cairns.

The dredging issue I am referring to is more recent than the 2014 Defence White Paper (although Cairns-based fleet options may have been discussed in it; not sure). I am talking about to the recent push for Cairns to be a "priority port" (which seems to have failed), but apparently Cairns has been given some small leeway to dredge to a certain depth...?

@HUGH72 Yes I've heard/read a lot about the tender but don't know anything further than that. That would be another great outcome for Cairns.

The dredging issue I am referring to is more recent than the 2014 Defence White Paper (although Cairns-based fleet options may have been discussed in it; not sure). I am talking about to the recent push for Cairns to be a "priority port" (which seems to have failed), but apparently Cairns has been given some small leeway to dredge to a certain depth...?

Edit: and yeah, that linked report (now that I read it ) is nowhere near as positive as what the gentleman I spoke to was inferring. So, yeah.... outside my area of knowledge.

Click to expand...

I think large scale dredging of the port will no longer happen, there is too much opposition from different interest groups.
The success of the ship building industry though would give a decent boost to the economy.

these two points are the key for me...and suggests a lot: Combine low salaries with higher than average [already high in qld] unemployment ...just the opposite of a place like Sydney [ I know comparing the 2 is not right, but you get what I'm trying to say- below average income + below average employment suggests not only is it hard to get a job, but even if you do, its tough to get a well paying one...just the opposite of Sydney...]. ..just seems too speculative discretionary proposition to me. The word discretionary is probably what I'm trying to say...Many other places are not- and id think that's where real estate is better suited to.

Click to expand...

Agree that unemployment is an issue but I wonder out of that unemployment number how many are actively seeking employment. Anecdotally though, those I have known to look for work in the region have had no issues securing it. For a high unemployment rate the mortgage delinquency rate is on par with the rest of the country, but that may change when interest rates go up.

When my husband and I moved from Melb to Cairns he took a job that paid $25k p/a less than a comparable job he had in Melb (truck driving) with a local company. He got some casual work with a national company which paid a bit more, but still less than Melb.

From my observations, if you want a decent income here, you need to be self employed unless you're employed in particular professions which are the minority. I've tried looking for some data that shows employed vs self employed and income in the region and can't find anything firm other than news article saying "Cairns is self employment capital of Australia" but my guess would be a lot of those earning above the average would be self employed. I know in my own little housing estate where house values range from $500k - $4m that the majority of house owners are self employed, particularly those in the upper range, with a variety of business being owned.

I guess what I'm getting at is yes, the average income is low, but the potential to earn a high income is there if you want to work for it.

I am a long way from an expert so please take my words with a grain of salt.

Insurance is still a big expense. @Bran 's experience of $5,000 premiums sounds horrendous! A 3-bed 2-bath block house in Bentley Park costs me just under $2k p.a. to insure, but it's nowhere near a flood zone.
.

Click to expand...

@hobo I pay very similar for a 4 bed 2 bath block home, near a flood zone in White Rock- i just changed over to Elders Insurance if thats any help.

Featured Business Members

Property Investing is a game of finance. Learn how to play and you’re far more likely to win! In this FREE E-book, discover the finance secrets to double your borrowing power and grow a more successful investment portfolio.

Are you looking to build a property portfolio? If so, are you looking for guidance and someone to hand hold you through the process? Hi, I am Mona Ali from Property Twins. I help people set up with finance correctly to build their property portfolio.